Parsad

Short little film on a veteran who was involved in the early testing of the atomic bomb. Very good...sad! http://screen.yahoo.com/operation-plumbbob-134423632.html Cheers!

Yes, and a week before Christmas...err, Berkshire Hathaway AGM. Santa...I mean Warren...is watching! ;D Cheers!

What is your "maximum I'll pay for this stock" price and what is your estimate of IV? I'd pay a little over 400/s, IV probably 500ish. $450 max. IV is somewhere between $625-700. Cheers!

Let's address the iPhone first. On 1 - ASPs have been more or less stable..How do you know that competition is eroding margins? How do you know that it is not costs? Lets say ASPs decrease going forward. Is it because competition is forcing prices down? Is it because Apple is entering lower priced segments as the higher priced segments saturate? How do you know? Margins are eroding partly due to cost, but mostly due to competition. Why do you think they are entering the lower priced segment? Because they are losing market share. And by entering the lower priced market, they will erode margins a bit. Correct me if I'm wrong, but it's the same reason that Jobs never wanted a smaller, lower-priced iPad. And I think you're jumping on the wrong guy here, because while I'm saying that margins will erode, they will still be higher than the competition. On more thing - this is not about falling in love with a stock. This is about understanding a business whose stock you own. I have held Apple for 12 years and during most of that time, I have heard people like you sing the same song. Take a look at the links in my signature. The links are very good, especially the last one. You could be right...I could be one of the same old song, but you've been wrong about the company's valuation for the last 12 months, correct? I never said Apple will disappear...quite the opposite actually...I'm saying competition will make things tougher, but they will continue to prosper. I'm long Apple, but only at a certain price and that happened in the recent past. The one thing I will say, and I continue to believe it, is that it won't be the same company after Jobs passed away...but will continue to be a very good company nonetheless. Cheers!

Yes, quite a shocker in the insurance business I think. Especially considering AIG's turnaround and existing leadership. Good for Berkshire though. Cheers!

First, the questions you are asking are predictions...and like any prediction, they are often incorrect and usually irrelevant to how a business operates in the future, as most CEO's have to be flexible, adaptable, focused and pro-active. Predictions are usually based on circumstances as they are, rather than what they may actually be. It's like Wayne Gretzky's quote about going to where the puck will be, rather than where the puck is...Fairfax's team has to continue to go to where the puck will be. 1. What do you think the pre-tax total return on the investment portfolio will be over the next 5-10 years? How do you arrive at that figure (i.e. what asset mix and returns are you assuming)? I have no clue, other than to say that they will continue to have plenty of fixed income instruments as long as Brian Bradstreet is around...he's one of the best in the world. They are very opportunistic, so if markets correct, they will go top-heavy into equities and distressed debt. 2. Historically, it looks like approx. 75% of the portfolio was invested in cash/bonds. The past 25+ years have been an amazing time to be a bond investor. Going forward, the tailwind from int. rates is gone. What is a reasonable return on Fairfax’s bond portfolio over the next 5-10 years assuming int. rates stay low? Again, you cannot view their portfolio as static. They made a massive move from bonds to cash recently, and in the last few years, they had made a massive move to insured municipal bonds. The team is very flexible with their portfolio...like Gretzky, they will go to where the yield on investment is highest...be it through preferreds, corporate financings, bonds, equities or acquistions. I don't expect the yield on the overall portfolio to be much different than the past as long as the existing team is together...so don't segregate what the returns on the bond portfolio may be. 3. Does anyone know any specific details about Fairfax’s fixed income portfolio. The returns of Brian Bradstreet and his team are out of this world. What % would be high yield or distressed? What kind of bond investments do they own? What is classified as 'taxable bonds'? For example, if Fairfax lends money to the Brick or Megabrands, are these investments counted in the bond returns? The original Brick deal was through the purchase of debentures. The Megabrands deal was done through a private placement purchase of stock and warrants. Usually, these types of investments are reported under "Investments in Associates"...Note 6 in the 2012 Annual Report Financials. I recommend you read all of their annual reports from day one, and that will give you a better idea of how the company allocates capital and reports it on their financial statements. Alot of work, yes...but there are no real shortcuts for really understanding a business. Cheers!

lol; I have been recirculating the same holdings like farts in a spacesuit. Markets go down, I buy a stock of Leaps (bac, jpm, aig), markets go up, I sell them. About 5-7% of my portfolio is churning every couple of weeks right now - quite lucrative really. Same, but this is what worries me! We have had a great year so far, but I'm just doing what I always do...buy cheap and then sell it as the market rationalizes prices. In the meantime, we keep lots of cash. I'm getting very worried...very worried that the markets are just blowing off every piece of disturbing news. Spain is in a full-on Depression, not unlike the 1930's in the U.S....Japan is being incredibly aggressive with their monetary policy...China is slowing...U.S. is recovering, but still tepid in many ways. Yet, asset prices for almost everything except commodities is ballooning! Buffett has been right for several years now...I'm concerned that Prem will be right in the near future. Cheers!

None of them. Not even Google, BYD or anything else...not for 50 years. I would much rather own See's Candies if I had to lock it away for that long! Cheers!

Yeah, I totally agree with you on this. I don't care if a business is growing or not. It's the amount of cash I can pull out or assets I can monetize, relative to the market price. Cheers!

If you think that 1, competition is eroding Apple's margins 2, Apple is not innovating 3, Competition has caught up with Apple then you do not understand Apple. I think 1) & 3) is happening as we speak...yet those margins will still be higher than its peers, even though they will come down. On 2), I also think Apple is still innovating, but so are its competitors. Nothing worse than someone falling in love with a stock. I highly recommend you not do that...whether it is Apple, Fairfax, Berkshire, Google or any other stock. Market prices are there to serve you...that is the only thing you can control, as management and companies (even the best) will falter at times. Cheers!

It is the most poorly understood company out there. But everyone thinks they're an expert on it. And it is damn cheap and going to be buying back 60B of stock and low prices. I couldn't ask for more! I would argue that Apple is one of the most understood companies out there. People parse through its data like it's a Fed statement. LOL! I would agree. Perhaps, ValueInv was referring to the company's fundamentals and valuation that is misunderstood. Apple is not a hard company to understand, but the markets are acting like it is going out of business in five years. Cheers!

So his style is to trade stocks in and out, instead of holding long term? I am a bit confused here. He has held SD for at least half a year now, so that doesn't seem like a quick flipper. More of an activist style. He's not a trader. Like most fund managers, including investors on here, they buy below their estimate of intrinsic value and sell closer to it. If a company's management is not doing their job, they will become active, but while they want to maximize shareholder value, they also don't want to be running the business day in, day out. So I suspect they will look at all alternatives, but the most likely scenario is they find a buyer/strategic partner that actually ends up developing the assets. Cheers!

I don't disagree with this at all - was just making some comments that I think could be pretty conservative. I definitely think the odds here are very favorable. I wonder at what point in the process this opportunity came up. This opportunity to me looks far better than the all out sale to Xing, Xing contemplated not that long ago. Did this opportunity perhaps come up during that sale process -- and thereby considered a superior proposal that Xing Xing could not match? No, I believe this came after they hired Michael Hefferon. Escape got them alot of attention, but they needed something to fill the pipeline until more work came in from that success. Tim and Craig went to Francis and Jeff to get the funding to make it happen. Cheers!

I see this film as having significantly higher box office potential than the Escape film based on the current established audience alone . Broadening the audience further could make this an outstanding success (consider that this film is probably more designed for kids, yet you have a captive group of adults - young and older) . Yet, I agree - I don't see this costing any more than Escape to produce - it might be less. I don't see this costing anywhere near what Escape did. Remember, Escape had multiple rewrites and there were plenty of issues on the storyline...the animation was done and had to be redone because of this. With this production, alot of the illustrative models and characters are already defined, as it is a video game. So transfering these designs to CGI/animation will be much easier and cheaper. This movie is also the work that the studio needed in the interim, to get it to the work they expect to come in for 2014 and on. So as interim work, there seems to be considerable profit potential as the majority producer. We also have no idea if Rainmaker will work on, or participate in any of the profits from a possible game being bundled with the movie release. So alot of positives and things yet to see. Should be interesting! Cheers!

Wow, if you go to Expedia, there is virtually nothing available other than a couple of hotels in Omaha and Council Bluffs. With the stock at record prices, I think they may have a record turnout! Cheers!

Yeah, but look at the slowdown in YoY unit and revenue growth for iPhone. That's the more troubling aspect of their quarter, at least with respect to iPhone. (Edit: And, yes, I realize that the headline YoY figures are lower because of channel inventory bump last year. Even adjusting for this, there's quite a slowdown.) Could the slowdown be because they haven't dropped ASPs enough for the older iPhone models? Tim Cook noted that Apple "recently made [iPhone 4] even more affordable to make it even more attractive to those first-time buyers [in China] and so we’re hopeful that will help iPhone sales in the future." We could see greater ASP drop going forward -- whether revenue growth will compensate for that remains to be seen. CC transcript: http://seekingalpha.com/article/1364041-apple-s-ceo-discusses-f2q13-results-earnings-call-transcript I'm troubled by this quarter. It looks to me like competitive pressures are, in fact, taking a toll in a way that makes it far less certain that unit sale growth will compensate adequately for ASP and GM decline. That means that folks are betting on the pipeline to provide earnings maintenance. I may have to rethink whether I want to hold onto my small position in AAPL. It is going to slow down, there is no two ways about it. There isn't only more competition, but the competition is better...and the business is becoming very commoditized. No different than any other business...whether it's operating systems, laptops, search engines, advertising, etc. You will never completely outlast the competition...you can only extend your longevity. And that's where I think people are wrong. Apple has gone from will grow to a trillion to will be demolished by the competition...the pendulum has swung too far the other way now. I think Apple can last many years, with very modest growth, and pay out alot of capital to shareholders over that time. No different than INTC, DELL, MSFT, etc. Cheers!

I can only presume that you mean that the cap will go away once he has enough votes and the incentive agreement will disappear once he has enough control . However, that wasn't your stance in the post that I linked to. You said (and the quotes are below) that he wouldn't terminate the agreement at any point and that he will remove the cap once he has enough votes for it to pass. You really haven't said "all along" that the incentive agreement would disappear. If you think now that the incentive agreement won't last forever, then it represents a change in your stance. I only proposed the wager because I knew you'd been incredulous when I'd suggested that the incentive agreement would be terminated at some point in the future. My last word in this matter. Best, Ragu Think what you like. Are you seeking approval from the board...if so, you are barking up the wrong tree. I'll simplify and qualify exactly what I want to say on this matter once and for all: Many actions in the last few years, from the name change, salary changes, incentive agreement, eventual cap on the compensation, dual class structure, restructuring of the board and licensing of the name have been to achieve one thing...greater control of the company. Some occurred right away, and some issues were put on the back burner because he could not get approval from shareholders. Your objectivity on the matter is skewed because you REALLY want to believe that this person will not screw you over, yet so many of the above actions indicate that you are either with the CEO or you are perceived to be against him. Yet the CEO is the employee of the shareholders! And this is the distinction you are missing here between this CEO and others who like Buffett, Prem, the Markels, Patrick Byrne and many others, are there to SERVE the shareholders! A very marked distinction that breeds loyalty, trust and mutual respect between the executives and the true OWNERS of the business! It's something I take very seriously with the partners in my funds. I would much rather I come out on the wrong end and lose everything, while my partners gain everything, than to lose an ounce of reputation with our partners or change the game on them at various points. We don't do that...money isn't that important to me or Alnesh! You cannot make people respect you...you have to earn it! And you breed the wrong type of respect if you think it comes from just "making some damn money". Cheers!

In the last flash crash, orders that were 30% away from market were cancelled. So... maybe your amazing trades will be cancelled and the exchange will have screwed you over. This could make a future flash crash a lot worse. I know I won't be buying on the way down... I do not want to get screwed over by trade cancellations. Also, you could get screwed over by limit orders if they trigger in a crash, but the market recovers almost immediately or before you have time to do anything. I'm sure some triggers went off today, and people lost money in just a matter of minutes. Cheers!

Wells increases dividend 20%. Cheers! http://finance.yahoo.com/news/wells-fargo-company-announces-increased-200100651.html

Like you did in this post, eh? First line from that post: Best, Ragu You read the whole post above...right? Why would I bet you, when I've said all along that the incentive agreement won't be in place in the future. Once he has the votes or enough control, the cap and the incentive agreement will disappear. He won't remove the incentive agreement or cap until he has control. That's what was meant by that previous post you linked. He will keep them in place until he doesn't need them anymore, and he won't remove them as he will own more and more of the company over time. But it's your investment...do what you want! Cheers!

If you are talking about the LP's in the Lion Fund, then it must have been a very small subset indeed, seeing as the overwhelming majority have stayed on. In fact, by staying on, they are paying more than they were paying before by virtue of the Lion Fund's ownership of BH stock. The problem here was that Sardar didn't have a meaningful ownership stake in BH. He said as much at last year's AM. They tried addressing it though this arrangement. You can argue all day long about the mechanics, but the intent wasn't to advantage Sardar over shareholders. In the fullness of time, I expect you'll see that the present value of the cash flows from the Lion Fund to BH will outweigh the present value of the compensation payments to Sardar. The outcome with respect to the incentive agreement is so clear that I'll make a wager with you (and anyone else that's interested, up to a maximum of 3 individual wagers): The incentive agreement will no longer be in force on or before the date of the 2021 Annual Meeting (10 full years since it was first approved). At stake will be a share of BH (or cash equivalent to market value on the date the wager is considered ended). The winner gets to pick the charity that the proceeds will go to. Sound alright? Best, Ragu Why would I bet you, when I've said all along that the incentive agreement won't be in place in the future. Once he has the votes or enough control, the cap and the incentive agreement will disappear. He put the incentive agreement in place, because he felt that if Steak'n Shake had gone down, he would have lost everything after years of work, because he had bet it all on SNS. He decided then he was going to worry about number one...himself! As for those partners who have not left, they should ask themselves what would have happened if the SNS experience was repeated and he lost that bet! Think Ackman with Target, Herbalife or JC Penny. This guy loves leverage and letting the dice roll. Unfortunately, one day you will learn the hard way. Cheers!

Yup, they are returning the cash to "long-term" investors, not the "one-time" investor who wants just a special dividend. Obviously with competition, margins are going to contract, and we've seen that. But their margins are still higher than the competition, and year over year sales of products are still increasing. So, it isn't going to grow to a trillion dollar company in the next 3 years, but it will remain a dominant, technology company that happens to be a cash cow! As long as their products are competitive and they continue to innovate on the product experience, they will remain a very big company generating a ton of free cash. Cheers!

Something tells me we won't be seeing Wellmont on this thread for a while. ;) Damn, I knew I should have bought a ton of LEAPs...instead I only bought 25% more stock at $391 last week. Anyway, one hell of a month, and I think it may still get better! Cheers!

Apple increases dividend 15% and stock buyback to $60B. Pretty much what I said. Cheers! http://finance.yahoo.com/news/apple-more-doubles-amount-crash-203611156.html

Hmm. I asked a couple of questions on another thread that hasn't elicited a response. Those aren't hard questions by any stretch of the imagination, but the answers-and their implications-might be pretty uncomfortable to face up to if you are a Sardar detractor. I'd be happy for you (or anyone else) to give those questions a go and see where that gets you. Best, Ragu mpauls, Couple of things that should provide some food for thought to you (and the other detractors): 1. Which set of investors have been with Sardar the longest? 2. How have they responded to the incentive agreement and Sardar's subsequent actions? Best, Ragu Why don't you let me give it a shot: 1. I received numerous calls from a subset of that set of investors when those issues came to light...they were distressed and upset. I also received calls from SNS shareholders...both individual and institutional. I also turned away requests from the media on the subject, as we do not speak to the media...but I certainly could have. Many investors have made money with him over the years...people are willing to overlook many flaws when they are making money. Hands down, I would much prefer to be aligned with Berkshire Hathaway, Fairfax Financial, Markel and Leucadia. He has even told you guys that they are not the next Berkshire Hathaway...he will make money, but not how many will perceive to be the "right" way. 2. Some have sold. Several of the closest allies to Sardar have left, including those that helped him take over Western Sizzlin and Steak'n Shake. I was one of his biggest proponents at one time, if the archive here does not indicate that! We were also the only people who sent a letter to the board when the name change was initiated. Again, people are willing to overlook errors in judgment when they are making money. We weren't willing to do so! We sold half our stake then, and we sold the other half after the compensation agreement was announced. I had a two hour conversation with Sardar and Phil in Omaha that weekend at their initiation...not unlike Onyx1. I tried to talk them out of it to no avail, to even raise the hurdle or lower the incentive as they had an advantage with captive capital. They would not listen. We sold our shares the next week after they had gone up 4 times in a year and a half. We've made more money for our partners by selling BH, than we would have made by holding it since. And I don't lose any sleep as we did what was ethical, and fought for a fair compensation plan for all shareholders. Your CEO didn't listen and he's not going to! As long as you understand that, it doesn't matter what any of us say and you are comfortable with that. Sardar will make money over time...lots! He will undoubtedly be rich. The question is, upon whose back is he going to make his fortune on? Again, there is nothing wrong with what he is doing...he just wants to make money. But so does Kim Kardashian! Cheers!